CROWDFUNDING

Project Proposal

Supervisor
Team Members

Session 2019-2023

University of Kotli AJ&K

Faculty of Computing & Engineering

Department Software Engineering

[11-24-2022]

1. Project Description
Crowdfunding is basically the practice of funding a project, Charity or a start-up
through raising money from various individuals. It is usually done using the internet, as
it is easily accessible to gather contacts and determine the stakeholders of the project.
Crowdfunding can be a suitable method for personal use, for real estate, loans, start-ups,
Charity and other businesses. Crowdfunding is emerging as one of the most affordable
and viable options for young entrepreneurs in the country.

2. Introduction
Crowdfunding is basically the practice of funding a project, Charity or a start-up
through raising money from various individuals. It is usually done using the internet, as
it is easily accessible to gather contacts and determine the stakeholders of the project.
Crowdfunding can be a suitable method for personal use, for real estate, loans, start-ups,
Charity and other businesses. Crowdfunding is emerging as one of the most affordable
and viable options for young entrepreneurs in the country. This Crowd-Funding platform
powered by blockchain technology eliminates the need for a middleman third party in a
number of ways, enhancing and supporting the practice .It Increased security in hostile
environments is just one of the many advantages that blockchain technology offers in a
wide range of industries. Blockchain is a linked list that employs Hash Pointers rather
than regular pointers. This allows each blockchain node to not only locate the next node
but also verify whether the data in that node has changed. This blockchain-based
crowdfunding system can receive funding. Anyone with an internet connection can use
this system. Blockchain increase transparency among the contributor and the
manager, the contributors can see their money and where their money will used i.e, the
purpose of the funding simply every details can be view by the contributors, it builds the
trust between the contributors and the mangers.

1. TYPES OF CROWDFUNDING

The type of crowdfunding to be used usually depends on the kind of business or activity
that is being set up. The goals and objectives of the business influence the type as well.
There are three basic types of crowdfunding. They are: Debt form of Crowdfunding: In
this medium, the investors or rather contributors are paid the money back along with
interest. It is also known as “peer to peer’ lending and usually does not involve the
traditional banking methods. Equity based Crowdfunding: In this method, the investors
become partially the owners of the business project. They are also accredited with
dividends. This is in away kind of a gamble because, if the project is successful, the share
value will go up, otherwise down. Donations: In this medium, the investors don’t look for
any kind of financial returns. They invest in their belief on the project which is usually
cause based. However, perks can be given in order to show gratitude towards the donators. Examples of these kind of projects are, charities, disaster relief, and other not-
for-profit organizations.

3. Application/Literature Review
These are the current fund-raising platform running in Pakistan they gathered funds
For various purpose like health, education, and WASH etc. [`1]

 Start-up The Seed Out company in Pakistan is collected money for the start up purpose or to help the needy people.

 Donation You can donate the money for helping needy the people

 You can Donate money for a project you wanna donate.

 For Education purpose you can donate money.

 Health For betterment of health care of the people you can doante.

The limitations of the application are listed below.

 These website or a company is not transparent.

 The donor never know where the money are going is the money given to the right people or not.

 The donors are less trust able because of in transparency.

 The money are given as a loan to the people and they have to return the money in given time.

 If their start-up or a business fail how they can return that money?
In present times, we are a generation wherein we want to see results of our
contributions immediately. The upcoming generation of investors would not want to be
just passive givers. Stake holders would like to keep a track of the way the organisation is
functioning, whether It is achieving its goals and guide accordingly. This requires
hundred percent transparency and athantic financial information of the related project
activity. Blockchain solves this issue. Blockchain is basically an independent and
transparent model which reduces uncertainty between parties who are exchanging the
values. Though it is a new technology, it can be used in real time cases like crowdfunding,
Crowdfunding is based on the trust between the investors and stakeholders. In order to
eliminate any kind of uncertainty with respect to utilization of the funds, blockchain
technology is the way. Crowdfunding is basically the practice of funding a project , Charity
or a start-up through raising money from various individuals. It is usually done using the
internet, as it is easily accessible to gather contacts and determine the stakeholders of the
project .So basically our project is blockchain based crowd funding platform which will
collect funds from crowds for different purposes for example donation, start-ups
,business, Charity and many more. It is blockchain based platform so it will be complete
transparent and more trustable, the donors can track or view the money the donate they
can view that their money used for the right project or given to the right person. The
donor or contributor can view the projects of the company the also they can view the
other contributors interest or investments in the projects.

 Transparent , The contributor view Company projects, his

 Contributors can Register, Login, invest, view profile, view Company projects.

 The contributors or donors transfer or donate the money the Smart Contract not to the manager of the company.

 The admin/Manager of the company withdraw money on the bases on the voting of the contributors/donors must have the 50 percent of the contributors agreed
or voted in the favor of withdraw money then the manager can withdraw the money otherwise they cannot withdraw or transfer the money.

 Set a deadline for the donation and also the set the required money for the project if the targeted money are not collected on the deadline then the contributors
can get back their money.

 The Contributors cannot get back their money before the deadline and also if the targated amount are completed then they cannot get their money back.

The limitations of the application are listed below.

 Demand more storage space when compared to conventional centralized databases.

 Less Efficient.

4. Problem Statement
Following are the problems which are present in the current companies.

4.1. Exorbitant fees:

Usually, crowdfunding platforms take a certain amount of fee for every project that is
listed. Sometimes, it’s a specific amount, and other times, it is taken as a percentage of the
contribution made by the contributors. This is a drawback for the availability of the funds
since start-ups are literally looking for every rupee to help themselves.

4.2. Scam start-ups: In some cases, start-ups turn out to be scams and leave the
investors with no option but to suffer the loss of their investment.

4.3. IP risk: Sometimes, few start-ups don’t protect their intellectual property and in
order expose them to other experienced investors who can steal their idea and enter the
market with the resources they could arrange for.

4.4 DIY marketing: Sometimes, its aggressive advertising and marketing that the
start-ups need, rather than spreading the word.
marketing requires a huge expenditure which again falls as a challenge on the funds for
the start-ups.

4.5. Fine print rules and regulations: not that all platforms accept all kinds of
services to be provided for. They have their own criterion, and if the start-up isn’t meeting
the criteria mentioned, then it poses as an obstacle for a start-up’s innovation and
business

5. Project Aim and Objectives

The main aims of the project are:-

5.1 Data verification of funder and fundraiser;-

It is natural for fundraising platform service providers to repeatedly verify
fundraising and donar. This is done to ensure that funders or funders are clear
individuals or organizations. Specifically for funraiser, to ensure fundraiser is a
person or organization that is suitable for submitting data submission proposals.
Based on 3 dominant crowdfunding process schemes, there is a process whereby the
fundraising does not reach the target with a certain amount and time then the funds
collected will be returned to the fundraiser either directly or indirectly and there is
also the possibility to develop the fundraising with certain term and conditions. In this
case, block chain technology can be used, so that data that enters the fundraising
database can be trusted. Based on the block chain category, the appropriate category
is applied to the fundraising process, the blockchain can be applied is categorized as a
consortium,where only certain data can be seen by the public. In the case of the AoN
and KIA schemes, where there is a possibility of a refund, with blockchain technology
all transactional historical data carried out between related parties is stored securely
and cannot be changed so that from here it can be used as a reference for direct
refunds to funders . Whereas in the SGS scheme, where the fundraising can be
developed with the terms and conditions that have been determined, with this
blockchain technology can be tracked from the beginning of this fundraising activity
to the final destination of the fundraising. So, if there are additional entities in the
future, then the data can be used without having to re-verify. This is in accordance
with the principle of the blockchain that applies historical storage of stored data. So,
it is almost certain that data stored with this concept is more trusted.

5.2 Eliminating dependency on third parties:-

One of the main objectives of implementing this block chain is to eliminate
dependence on third parties or intermediaries in the fundraising process. in this case,
the third party commonly involved is the bank, the fintech company, of course, legal
services if a problem occurs. In this case, by applying block chain technology,
fundraisers can remove this dependency. For example, the banks, with the application
of block-fighting technology, fundraisers can utilize cryptocurrency that is commonly
used by smart contract and blockchain service providers. Thus, funds are stored in a
secure system and the verification process is arguably unique. Where every
transaction carried out of course, required a unique code, so that transaction data will
not be lost or overwritten Shorten the submission of campaign and the disbursement
of funds each fundraising organization certainly has its own terms and conditions. In
this case, the technology that can be used to standardize these rules is the smart
contract. In this case, in terms of fundraisers, fundraisers must meet the requirements
proposed by fundraisers, if fundraisers agree with these requirements, then smart
contracts will apply between fundraising organizations and fundraisers. Likewise,
from fundraising, if the terms and condition of the smart contract, in the fundraising
process (for example, the deadline for collecting funds or the total funds collected
have been obtained), the funds collected will be immediately disbursed without
having to carry out a verification process that requires time for the disbursement
process fund.

5.3 Determines the dominant of fundraising.

For AoN and KIA schemas, with the application of smart contracts, if required rules
are not fulfilled (for example, fundraising does not meet the target according to a
certain time and amount). In the AoN scheme, the funds will be returned directly to
the funders while the KIA scheme will directly apply for a refund to the fundraiser
whether the funds can be returned or not. while in the SGS scheme, smart contracts
can be implemented by automating further development of the campaign, so that
fundraisers can make terms and conditions as a reference whether fundraising can be
developed. These terms and conditions are embedded into the smart contract system.
Smart contracts between parties related to the fundraising process are stored in a
blockchain database, so that the data from the smart contract can be seen in the
history of changes in the smart contract, to avoid problems that occur if there are
changes in the contents of the smart contract.

6. Scope and Significance

6.1 Project Scope
This blockchain-based crowd-funding system can receive funding. Anyone with an
internet connection can use this system.It is web-based application which can be used by
any persons in the world and can donate funds in their desire project.Any type of web
browser can be used for take part or used the applocation.
The system comprises 2 major modules with their sub-modules as follows:
 Admin:

o Login

o Handle Projects

1. Pending List of Projects - Project Company details - Approve/Reject

2. Approved - View List of Projects - Filter by domain/category - Project Company
details - View transactions by investors from this platform (with a status of whether the
transaction is manipulated)
3. Transactions - List of Projects - Project Company details – Approve
 Transactions - List of Projects which are accepted whether they had tampered with the Crowd-Funding.
 View Users –
List details of the Users Register
 User:

o Register

o Login

o Profile

o CP

o Invest - View the List of Projects you want the funding - Filter by domain/category -Project Company details - View transactions by investors

from this platform (with a status of whether the transaction is manipulated - Invest your money (if even a single transaction is found manipulated
the system will not allow investing)

o MyProjects Add/Update/delete/view - Need Approval of Admin to the project to go

o public - List of Projects - Project Company details – view, investors transactions – status whether a transaction was manipulated by any source

6.2 Project Significance

Benefits of blockchain in crowdfunding:

6.1. Token system: While crowdfunding requires enabling the emergence of tangible
products, blockchain usually relies on asset tokenization in order to provide investors
with equity or similar concepts, namely ICO (Initial Coin Offering). In this way, investors
would be able to see the success that is in fact proportional to the subsequent success of
the company itself. This basically means that it has the potential to exploit the various
investment opportunities in the world. Funds being a major aspect for start-ups, this
could help them by saving money on recruitment of their employees by granting them
compensation proportional to the ownership of the business, therefore converting it into
an employee-owned enterprise. In this case, asset tokens act as currency of their own
form, hence allowing the organisations to hire more professionals, particularly for
marketing and advertising.

6.2. Excess availability: Any company that uses blockchain technology for
crowdfunding would definitely get funded. Additionally, any individual who has an
internet connection will be able to contribute to such projects. To individuals who invest
in crowdfunding using blockchain technology, it is beneficial in a way that “fraud” will be
absent in such cases because the investors will receive their ownership or a fraction of
the enterprise immediately.

6.3. Decentralization: The advantage in this model is that, start-ups are not going to
utilize the services of any platform or platforms in order to raise funds. They no longer
have to abide by any rules or regulations as provided by various platforms. Hence, any
project that has the capability of gaining exposure can get funds and therefore can also
omit the requirement of paying the fees to the platforms. Thus, this makes crowd funding
cheap and affordable to the investors and contributors.

6.4. Smart Contracts: There are various ways in which smart contracts enabled by
blockchain technology can establish more accountability when it comes to crowd funding.
First and foremost, the smart contracts would create obstacles that would hinder the
funds from being released without derivation with regards to a project or any other
legitimate campaign. Therefore, this would in turn prevent huge sums of money from
being embezzled by those who have a malafide intention or persons who are not eligible
to run the campaign in the first place. It is self-executing and by default transfers the
amount of capital for further development if all the criterion are met.

7. Project Development Methodology

The first step of the Development Methodology is Software Requirement
Specification, Tools used for this method is Ms -Word , Latex. Analysis The Second Step is the requirement analysis in which we analysis the requirements, Tools used for
this
method is Jama Software. Caliber. Design In this step we design the project or draw the
diagrams of the project the tools are used in this step are Draw.io,data flow diagram.
Coding In this step we develop the project for this we used the VS Code and the and
the Remix IDE. Testing In this Step we test the project and fix the bugs if any bugs exits.We used these tools for testing Selenium,TestingWhiz. Deployment This is the fi-
nal step in which we deploy the project. Bamboo , TeamCity, AWS CodeDeploy.

8. Tools and Technologies

We will used these two tools for develop our project

o Visual Studio Code

o Remix IDE.

The system is built by using React Js, CSS, JavaScript as front-end and use NodeJS, JavaScript as its backend. For contracts development, Solidity language is used. The
contract is compiled into ABI code in JSON format using solc npm package. The ABI interface then is parsed to instance of Web3 provider for contract deployment. In-
stead of using local node, we used Infula which acts as remote node to connect to Ethereum network. To start using the system, we need to set up cryptocurrency wallet
called Meta mask. Meta mask is a browser extension which allows users to interact with any decentralized application(Apps). After user create account in Meta mask, he
can transfer the Ethereum to his account. Once user have some Eth in his account, he can start interacting with the system as Meta mask has injected a Web3 instance in
the web browser.

9. Work Plan
9.1 Work Distribution
Clear work division among group members in a table.

S.NO Team Members Work Assignment

1 Asad Ayub Analysis

2 Mamoon Hashmi Design

3 Asad Ayub Testing

4 Mamoon Hashmi Integration